Property developer reports 28% NAV dip

REAL Estate Opportunities Ltd reported a 28% fall in net asset value (NAV) per share for 2008 from a year ago as revaluation of its portfolio fell in the Ireland and Britain, and warned of pressure on covenants.

“Indications are that valuations are likely to decline in 2009, placing additional pressure on covenant compliance. However, the company remains confident about its ability to renegotiate covenants with its banks if required,” chairman Ray Horney said in a statement.

The company kept a cautious outlook and said it would focus on managing costs and cash.

The property developer said its diluted European public real estate association (EPRA) NAV per share fell to 104.1 pence at December 31, from 143.9 pence a year earlier.

The British portfolio saw a revaluation decline after capitalised costs of 20%, while its Irish portfolio values fell by 15%, the company said yesterday.

However, its portfolio value rose 8% to £1.91 billion (e2.06bn) at December 31 as a strong euro offset the drop in revaluation, the company said.

Real Estate Opportunities’ property income rose 60% from the previous year to £32 million.

The company, which is behind the £4 billion scheme to build a 300-metre high ‘eco-chimney’ on the site of the former Battersea Power Station in London, said it had made good progress on the project.